Investors can buy a piece of the Empire State Building

NEW YORK — King Kong climbed it. A bomber crashed into it. Now the country's most iconic building is going public.

The Empire State Building is set to make its debut Wednesday on the New York Stock Exchange. And for $13 — about half the cost of a ticket to its famous observation deck — you can own a piece of the American landmark.

When it was completed in 1931, the 102-story Art Deco landmark reigned as the tallest building in the world. An enduring symbol of Gotham's vertical prowess, it retained its status as the tallest skyscraper in New York City for four decades, until it was eclipsed by the old World Trade Center at the foot of Manhattan.

"It's a piece of history," said Michael Knott, managing director of real estate research firm Green Street Advisors in Newport Beach. "It's a piece of the most famous structure in the entire world, arguably."

The Empire State Building is the centerpiece of a real estate portfolio that has raised $929.5 million by selling 71.5 million shares at $13 apiece. Public interest in the building could help lift Empire State Realty Trust Inc.'s stock when it begins trading under the ticker "ESRT."

In addition to its namesake, the real estate portfolio owns 11 other office buildings and six retail properties in the New York metropolitan area. But the Empire State Building is the trophy.

Despite its illustrious history, the 82-year-old skyscraper has struggled to attract tenants compared with flashier modern buildings in Manhattan. The building's occupancy has lagged behind the rest of New York's market for corporate real estate.

But regulatory filings reveal that the Empire State Building has a surprising moneymaker: its observation decks on the 86th and 102nd floors. Last year they raked in $92 million in revenue.

The observation decks are so lucrative that, by Knott's calculations, they are the building's most valuable asset. They're worth $1.45 billion of the building's estimated $2.5-billion value, he said.

They draw 4.2 million tourists a year, offering sweeping Midtown Manhattan views of gleaming skyscrapers. The price of admission is $27, or up to $67 to avoid lines.

The Empire State Building's annual visits surpass those to its primary competitor, the Top of the Rock viewing deck at Rockefeller Center (2.5 million). It even draws more visitors more than the Statue of Liberty (3.5 million), according to Green Street Advisors.

"It's just such a cash cow," Knott said.

The observation decks have propped up the building's bottom line ever since it opened in 1931. Back then the country was sinking into the Great Depression and the building had difficulty luring tenants. It even earned the nickname the "Empty State Building."

"The observation deck was the one part of the building that was in the black," said Carol Willis, a historian who founded and directs the Skyscraper Museum in New York. "That helped it through hard times."

What made the Empire State Building different from other new structures was its sheer size, Willis said. The building offered more than 2 million square feet of space, about twice as much as its stylish neighbor uptown and to the east, the Chrysler Building.

"It was seen as a demonstration of the ambition and the know-how of American capitalism," Willis said.

The Empire State Building has faced leasing challenges recently as well.

Although it is home to an eclectic mix of tenants, including professional networking site LinkedIn and banking regulator the Federal Deposit Insurance Corp., the building was 78% occupied at the end of the second quarter. The market occupancy rate for Manhattan office buildings is roughly 90%.

The Empire State Realty Trust's initial public offering comes at an unusual time. The broad Standard & Poor's 500 index has soared some 19% this year, but shares of real estate investment trusts have lagged behind. Office REIT stocks have risen only about 5% this year, according to a Bloomberg index.

In selling about 35% of the company to the public, Empire State Realty Trust will help streamline the company's complicated ownership structure.

The company is controlled by the Malkin family, prominent real estate investors who sponsored the IPO after a lengthy battle with other investors. The company is headed by Chief Executive Anthony Malkin, who is also chairman and president.

The IPO will essentially buy out the remaining interest held by the estate of the notorious New York City developer Leona Helmsley, once dubbed the "Queen of Mean." Filings with the Securities and Exchange Commission also indicate that the newly public company will use some of the proceeds to pay down debts.

In coming years, the Empire State Building could face competition from a rebuilt old rival. One World Trade Center's own observation deck could lure away tourists when it opens in 2015.

Knott, the real estate analyst, predicted that the Empire State Building would maintain its allure.

"The Empire State Building will be its own draw," he said. "The view is still superior at the Empire State Building, and it's still its own iconic brand."

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